CapX2020 Utilities Request Delay; CETF Asking MPUC to Cease Project

Posted on | May 27, 2010 |

The Brookings CapX2020 Project (high voltage power lines from South Dakota to the Twin Cities) is floundering due to controversy at the federal level as to how it will be funded. On May 17, 2010, eleven CapX2020 utilities, including Xcel Energy, filed a request to the Minnesota Public Utilities Commission to push back the in-service date of the project from 2012 to 2015. This proposed delay in the Brookings CapX2020 Project would mean the power line would go into service eight years after the Application was filed for the Project and eleven years after the only study that was done finding a regional need for the CapX2020 projects. Citizens groups including Citizens Energy Task Force (www.cetf.us) have long questioned the need for CapX2020, criticized reliance on out-of-date information about energy demand, argued that the CapX2020 projects are overly costly to citizens, and would impair protected wildlife areas.

The CapX2020 utilities are now requesting delay in the Brookings Project since there is no agreement about who would pay for this expensive ($700 to $750 million in 2007 dollars) high voltage power line. Since the transmission review authorities (MISO) have determined that the project is not needed for regional reliability, usual rules at the Federal Energy Regulatory Commission would place half the burden of funding this project on developers, such as wind farms. The huge cost of this project could prevent rather than facilitate wind development under this standard cost allocation.

Stated Paula Maccabee, attorney for CETF, “By 2015, the utilities’ new proposed in-service date, the forecast of regional energy demand studied to justify the Brookings CapX2020 project would be over a decade out-of-date. The Commission should re-open the question of need and re-examine the high cost of the CapX2020 projects rather than approving the utilities’ request for delay of the power line from South Dakota to the Twin Cities.”

Efforts to find another way to pay for the Brookings CapX2020 Project have been unsuccessful, as the utilities explained in their filing to the MPUC:

“The MISO Tariff structure applicable to the Brookings Project is in transition and has been the subject of contested proceedings at the Federal Energy Regulatory Commission.”

“Applicants and many other stakeholders have been working diligently with MISO on developing a consensus approach to cost allocation for major new infrastructure projects like the Brookings Project. The process has prompted a vigorous debate and it is unclear whether or when consensus will be reached.”

“This situation has left Applicants and the other potential owners of the Brookings Project with considerable uncertainty about the actual cost allocation methodology that will apply to their investment in the Brookings Project.”

At the end of April, the MPUC denied the CapX2020 utilities the ability to get money from ratepayers now to pay for the Brookings project due to the uncertainty about cost recovery. With no end to the controversy in sight and no sure way to recover their investment, the utilities have asked to delay the in-service date of the project until 2015. Under Minnesota law, utilities need to get Commission approval if they want to delay a certificate of need by more than one year.

CETF and United Citizens Action Network have also appealed the Minnesota Public Utilities Commission’s decision to approve certificates of need for the CapX2020 power lines. This appeal is still pending at the Minnesota Court of Appeals.  Details on the appeal available by clicking here.

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